3 Trends to Watch Out For in Post-Pandemic Digital Media & Entertainment
At the beginning of the COVID-19 pandemic, arts organizations of all genres, sizes, and geographies turned to digital content creation as a short-term solution to closure. Now — with a handful of vaccines approved for use in most countries, universities announcing reopening plans for the fall, businesses unshuttering their windows, and an end in sight — we’re all asking the same question: where do we go from here? What happens to the digital capabilities we’ve built up, the platforms we’ve designed, tested and refined for more than a year, and the technical skills we’ve acquired along the way? And what happens to the digital archives we’ve amassed?
While the answer will necessarily look different for every organization, and innovation will take many forms, arts leaders can turn to the media and entertainment industries to gain a sense of what to expect in the post-pandemic digital landscape. Read on for three trends to watch for in media and entertainment and what they could mean for the post-pandemic digital ecosystem.
1. Subscription video-on-demand platforms will continue to tier pricing and offer premium paid content to increase the profitability of the subscription-based business model.
According to a December 2020 study by Deloitte, some 22% of American consumers paid to rent premium video-on-demand (PVoD) movies in the early days of the COVID-19 pandemic, and 90% said they would likely do so again. Engagement has followed as film production studios release more and more content on streaming services, with 35% of American consumers having watched a new PVoD release by October 2020.
Most often, tiered models offer “free” content with a subscription, minimal rental fees for some content, and premium fees for exclusive offers. Forthcoming releases suggest that subscription-based streaming services will continue to put premium content behind paywalls to generate more revenue.
To watch Disney’s newest film Raya and the Last Dragon before it becomes available to all subscribers in early June 2021, Disney+ members must pay for premier access at $29.99. Amazon Prime subscribers will continue to be able to watch new releases like Boogie or The Father before other subscribers — and before the theater-goers of a post-pandemic world — with $19.99 HD rentals through In-Theater At Home.
2. The industry will leverage newly learned strategies for creating a sense of exclusivity and urgency around a big release.
Prior to the COVID-19 pandemic, movie theater chains held onto a standard 90-day window of exclusivity for new releases before films became eligible for streaming on demand. The monumental challenges wrought by the pandemic led film studios and distributors, which normally measure success with box office sales, to strike new deals with subscription-based streaming platforms. And to do so means to radically reshape the messaging and the marketing to attract at-home audiences — including for highly-anticipated releases like HBO Max’s Wonder Woman 1984 and Amazon’s Borat Subsequent Moviefilm and Tenet.
These platforms have proven that it is possible to generate a sense of exclusivity around new releases, even without a 90-day exclusive box office release. And offering paid premium content (per the previous section) is just one of many ways to do it. Limiting content availability to a restricted viewing period is another; HBO Max’s same-day premieres are removed from the platform following a 31-day period, after which they become exclusive to theaters for another 31 days before being available for purchase.
Platforms have also differentiated the viewing experience by offering opportunities for interaction and connection. As of December 2020, all Hulu subscribers can watch movies and shows together from different locations through the Hulu Watch Party feature; Hulu says that its original film The Happiest Season broke records when it unrolled over Thanksgiving with Watch Party capabilities. Other streaming platforms have followed suit: Disney+ now has GroupWatch, Amazon has Prime Video Watch Party, Sling TV has Sling Watch Party, and more.
Moving forward, there is evidence to suggest that reopening theaters may retain deals with production companies for periods of theatrical exclusivity (albeit shorter ones). After previously announcing that all its 2021 releases would be day-and-date (same-day release in theatres and on HBO Max), Warner Bros. Pictures recently struck a deal with Regal Theaters to return to a 45-day window of theatrical exclusivity beginning in 2022. The acceleration of “movie windowing” suggests that hybrid monetization models combining in-house, box office sales with soon-after subscription-based streaming availability may become more commonplace in the post-pandemic landscape.
3. Newly formed partnerships will spur innovation and increase the profitability of made-for-digital content.
Subscription-based streaming services are being made to compete within an increasingly saturated market, and it’s true that content pulls at least part of the weight to bring in new payers. Hamilton’s release in early July led to a 74% increase in Disney Plus downloads, coincidentally right after the platform had stopped its 7-day free trial option. Early on in the pandemic, Trolls World Tour opted to release its sequel exclusively online on Apple TV+ for $19.99. Earning nearly $100 million in three weeks, the family-friendly movie generated more revenue for Universal in 3 weeks than the first Trolls movie did after 5 months in the box office in 2016. And Apple TV+ has only continued to benefit from its deals with high-profile artists; pop singer Billie Eilish’s February 2021 documentary drew a record-breaking 33% new viewers to the service.
While exclusively offering much-anticipated content can make a difference in viewership, it’s not an option for the majority of lower-budget production and distribution companies, let alone nonprofits in the arts not exclusively focused on digital content. Without the support of robust shared values embedded within the service, popular content objects are unlikely to create long-term subscriber loyalty to a subscription-based platform.
One way that streaming services have overcome the obstacle to building customer loyalty is by forming innovative new partnerships with companies in various sectors — and each other — increasing the scope of what they can offer and improving the customer experience. In 2019, Microsoft announced a strategic partnership with the Sony Corporation to jointly develop cloud solutions in Microsoft Azure to enhance the companies’ respective gaming and content-streaming services. By April 2020, Microsoft’s game streaming platform had gained hundreds of thousands of users, and PlayStation had amassed over 2.2 million paid subscribers. Satya Nadella, the CEO of Microsoft, has said that the partnership will help to “deliver new gaming and entertainment experiences for customers,” raising the value of both companies’ products.
More recently, the Walt Disney Company, ESPN and National Hockey League reached a groundbreaking agreement to bring hockey to millions of viewers across the world through ESPN+, Hulu, and the brand-new “ESPN+ on Hulu” feature which gives Hulu subscribers access to ESPN+ content directly in the Hulu environment. The addition of 100 exclusive national regular-games per season, coverage of the NHL’s Face-Off, and other NHL special events throughout the season highlights the value and growth of the Disney Bundle, a package deal including Disney+, ESPN+, and Hulu.
Speculating on the Post-Pandemic Ecosystem for Arts Organizations in Digital
What can these trends tell us about the future of the digital space for arts organizations, which are more likely to be not-for-profit — and substantially smaller — than the Amazon Primes and Netflixes of the world? For one, it is clear that given the substantial costs associated with digital, partnerships and coalitions will similarly be essential to progress, not only to cover costs but also to attract expansive and active digital audiences. Second, arts organizations that can integrate digital offerings in a mission-aligned way have the best shot at sustaining digital in the long term; this will look different strategically for each organization, but will likely require combining monetization models to increase revenue generation. And third, it is possible to create a sense of exclusivity around a virtual livestream or on-demand digital content. This may be important to consider as many organizations use reopening as a reset for donor benefit schemes, among other things.
While there are many unknowns, what has been made clear throughout the COVID-19 pandemic is this: there is an audience for digital. And in particular, the new audiences we have found during this time — audiences that were previously unable to access our offerings, for one reason or another — have the potential to stay with us, if we proactively seek to foster their loyalty and connection to our brand.
Members, you can still register to participate in our ongoing discussion groups about packaging, marketing, and creating digital content and join the Slack group to engage in direct conversation with peer organizations. As always, please don’t hesitate to reach out to your member advisor or info@advisoryarts.com with any questions or concerns.